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Service is the new growth engine for industrial manufacturers: KPMG report
Industry News- Sep 15,23
KPMG International report - titled ‘The future of smart industrials’ - discusses the challenges manufacturers are experiencing with their current efforts and the capabilities that are needed for success, among other key insights on the sector.
Future-focused manufacturers can win by embracing digitally enabled services as the foundation of both their business and operating models, according to the new KPMG International report - titled "The future of smart industrials".
The industrial manufacturing sector is navigating through a pivotal phase and will continue to experience disruption in the near future owing to unfamiliar business environment shaped by advances in disruptive technology, economic turmoil, shifting customer expectations, uncertain labor and materials supply markets, and the world’s emergence from the COVID-19 pandemic.
Against this backdrop, KPMG International conducted a survey of 395 industrial manufacturing leaders across the globe to understand their perspectives on the opportunity and impact of digitally enabled aftermarket and field service on the sector’s future. The report also discusses the challenges manufacturers are experiencing with their current efforts and the capabilities that are needed for success. Participants included manufacturers that classify themselves as machinery and component as well as project or solution providers.
Commenting on the survey findings, Vinod Ramachandran, Global Leader, Industry 4.0, KPMG International said, “The research shows that a connected approach helps drive better performance. A primary takeaway from the survey is the extent to which business leaders recognise the shifting landscape and are investing making a transition. More than 6 out of 10 executives in our survey indicate their organisations are currently investing in or have included investment in their capital plans for digital transformation and connected products.”
KPMG professionals identified eight signals of change based on the investment priorities that industrial manufacturing survey respondents reported:
- Connected products: 85% of respondents indicated current plans to invest in connected products. Development and deployment of connected products can help enable digital services to improve service efficiency and effectiveness, increase customer lifetime value, and drive services growth.
- Shift to XaaS models: 73% of respondents indicated current plans to invest in XaaS. Manufacturers’ shift to an anything-as-a-service (XaaS) model involves the development of new services as well as capabilities to price, sell, deliver, and bill for a broad range of services through subscription, pay-for-use, or other models.
- Digital transformation: 90% of respondents have current plans to invest in digital transformation. Manufacturers are modernizing their technology architecture, applications, and infrastructure and enhancing integration to enable connected services.
- Installation excellence: 85% of respondents have current plans to invest in installation and implementation. Manufacturers are optimizing capabilities to install/implement solutions that maximize value to the customer while increasing service attach rates for digital services and customer lifetime value.
- Resilient supply chain: 76% of respondents have current plans to invest in their supply chain. Manufacturers are building resilient supply chains that connect customers, channel partners, sales, field services, supplier development, and procurement processes to orchestrate visibility and collaboration across the lifecycle of a customer solution.
- Omnichannel service: 83% of respondents have current plans to invest in contact-center modernization. Redefining contact-center capabilities can help improve customer experience and will help enable efficient service.
- Digital twins: 85% of respondents have plans to invest in digital twins. Manufacturers are developing digital twins of connected solutions, equipment, and assets to enable visualization, simulation, modeling, and other capabilities, which can help better able to support service planning and execution as well as solution design and sales through simulation and modeling.
- Smarter services: 75% of respondents indicated current plans to invest in intelligent analytics. Industrial manufacturers are utilising intelligent analytics to optimise pricing, sales, quoting, service planning, and service execution.
Based on the above-mentioned signals, KPMG professionals have identified five strategic imperatives that manufacturers should focus on to accelerate and complete this shift. These are:
- Embrace the digital transformation of industrial manufacturing aftermarket and field service
- Understanding the potential benefits of digitally enabled services
- Evolve aftermarket and field service business models
- Drive culture and capability change
- Address privacy and security challenges
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